After Van Tuyl Mega-Deal, Who’s Next?

Who do you believe will be involved in the next big dealership deal, Asbury or Hendrick? 

I believe the next big deal will involve the Asbury Automotive Group (No.8 on the WardsAuto Megadealer 100). The main question: What end of the transaction will it be on?   

Hendrick Automotive (No.7 on the WardsAuto megadealer ranking) may seem like the de facto choice by many since it becomes the largest privately owned group when the Buffett-Van Tuyl deal is consummated.

But I do not anticipate Hendrick merging or selling in the next few years. Unlike Asbury, I see Hendrick as a pure automotive company at its cellular level. That is very much in the image of its founder and driving force, Rick Hendrick.

I can see Hendrick doing an IPO and following the route of Penske. But I do not immediately see a merger or acquisition like we saw with Van Tuyl. 

Yet, Asbury is a group ripe with possibilities and positioned for great things to happen. It only remains to be seen if it will be in the driver’s seat or not.

Lithia has made its move in acquiring DCH and Group 1 keeps expanding aggressively abroad. While Asbury acquired a few stores earlier this year, this may not sufficiently satisfy the appetite of the greater market. 

Maybe the most surprising thing from Asbury in the next year will be no news at all. If nothing were to happen with Asbury, that would be almost as newsworthy as 2014’s Lithia-DCH and Buffett-Van Tuyl deals.

Phil Villegas is a principal at Axiom Advisors, a boutique automotive dealership consulting firm specializing in mergers and acquisitions, enterprise management, and litigation support. He can be reached at [email protected] or 786-472-2800

Call: 786-472-2800